DeNovo | Legal Costs Experts

💷 Resisting a payment on account: assertion is not evidence In R (Siddiqui) v Financial Ombudsman Service Ltd [2026] EWHC 1878 (Admin), the Administrative Court considered the costs consequences following the dismissal of a judicial review concerning legal expenses insurance. The claimant argued that: ▪️ the complexity and public importance of the case justified departing from the usual costs rule; and ▪️ his limited means and personal circumstances made a payment on account inappropriate. The court rejected both arguments. The claimant was ordered to pay the Financial Ombudsman Service’s costs on the standard basis. Under CPR 44.2(8), the court also ordered a payment on account of £25,000, reduced from the £30,916.20 sought. The central feature of the decision is the absence of supporting evidence. The claimant asserted that payment would cause hardship, but provided no evidence of his means. Referring to Mahan Air v Blue Sky One Ltd [2011] EWCA Civ 544, the court said that a party relying on impecuniosity must provide full and frank evidence of its financial position. Without that evidence, the court found: 📌 no sufficient reason to displace the usual rule that costs follow the event; 📌 no “good reason” not to order a payment on account under CPR 44.2(8); and 📌 no sufficient evidential basis for a stay of enforcement pending appeal. The court nevertheless retained a degree of flexibility. It reduced the payment sought and gave the claimant liberty to apply for staged payments, provided that any application was supported by full and frank disclosure of his assets and income. The decision draws a clear distinction between an inability to pay and an unsupported assertion of inability to pay. A party seeking to resist a payment on account, vary its terms or stay enforcement should address the evidential position at the outset. That may require detailed evidence of assets, income, liabilities and the practical effect of immediate payment. Where medical circumstances are relied upon, the evidence should also explain its factual basis, the assessment undertaken and its relevance to the relief sought. ⚖️ At DeNovo | Legal Costs Experts, we advise on complex and high-value costs disputes arising from commercial litigation, group actions and other high-stakes proceedings. #LitigationCosts #CostsLaw #CivilProcedure #CPR #PaymentOnAccount #DetailedAssessment #CommercialLitigation #JudicialReview #DisputeResolution

⚖️  Winning the application but losing half your costs The consequential costs judgment in ICG Manager Ltd v Colliers International Valuation UK LLP (Re Consequential Matters) [2026] EWHC 1788 (Ch) is a short decision, but one that costs practitioners may find of interest. The underlying proceedings concern a substantial professional negligence claim arising from an allegedly negligent property valuation. Following the court's earlier decision to permit the claimants to re-amend their Particulars of Claim in most (but not all) respects, the court turned to the consequential issues of directions and costs. Although the claimants were the successful party on the amendment application, they did not recover all of their costs. Their costs schedule totalled £38,601.50, but the court awarded 50%, summarily assessed at £19,300. The reduction reflected the court's view that the claimants had unnecessarily increased both their own costs and those of the defendant by serving successive draft amendments. An earlier version of the proposed pleading remained consistent with a breach of fiduciary duty allegation that the claimants later said they had never intended to advance. The defendant also remained entitled to its costs "of and occasioned by the amendments", with the costs incurred in dealing with the earlier abortive drafts reflected in the reduction to the claimants' recovery. For those dealing with amendment applications, the decision demonstrates that the court's assessment of costs may be influenced not only by the outcome of the application, but also by the way in which the application has been pursued. 💼 At DeNovo | Legal Costs Experts, we advise on litigation costs arising from complex, high-value commercial disputes, professional negligence claims and other high-stakes litigation. If you'd like to discuss a costs-related matter, our specialist team would be pleased to help. #LitigationCosts #CommercialLitigation #CivilProcedure #CostsLaw #ProfessionalNegligence #DisputeResolution

Costs following an unsuccessful challenge to a family arbitration award – B v B (Costs) [2026] EWFC 198 (B) HHJ Willans has considered when an unsuccessful challenge to a children arbitration award may justify a costs order. ⚖️ The respondent's challenge to an arbitral determination was dismissed at the triage stage as having no real prospect of success. The applicant then sought costs of £17,899.28. Although the usual rule that costs follow the event does not apply in children proceedings, the court concluded that the respondent's conduct in pursuing the challenge was unreasonable and made a costs order. The judge accepted that costs remain exceptional in children cases and that the court's discretion turns on what is just, with particular regard to the parties' conduct. Three features led to the costs order. • The parties had voluntarily chosen arbitration as a route to achieving a specialist and final determination. Although arbitral awards remain open to challenge, parties are expected to respect the outcome unless proper grounds exist. • The challenge was brought against a comprehensive determination reached after a full evidential hearing. Having the benefit of that decision, together with specialist legal advice, was relevant when assessing whether pursuing the challenge was objectively reasonable. • Although the judge warned against relying on hindsight, he regarded the fact that every ground failed at the triage stage as relevant to the assessment of reasonableness. He also made clear that the absence of findings of bad faith in the substantive judgment did not prevent the court reaching a different conclusion when deciding costs. 📌 The judgment is also a reminder that a successful party will not necessarily recover all of its costs. The court carried out a summary assessment on the standard basis, reducing several items before reducing the claim from £17,899.28 to £12,000 inclusive of VAT. DeNovo | Legal Costs Experts specialises in high-value and high-stakes litigation costs matters. We advise solicitors, businesses and private clients on costs strategy, costs disputes and complex costs issues arising throughout the lifecycle of litigation. #FamilyArbitration #CostsLaw #ChildrenProceedings #CivilProcedure #LitigationConduct #SummaryAssessment #DisputeResolution

Costs budgeting: significant developments are not enough The High Court's decision in Rudan Business Holding S.A v Tridan Trusted Advisors AG & Ors [2025] EWHC 3565 (Ch) provides a useful illustration of how CPR 3.15A operates where litigation expands beyond the assumptions underpinning an approved costs budget. Both parties argued that the proceedings had developed significantly since their budgets were approved. The court accepted that they had—but that did not mean every proposed variation would be allowed. ⚖️ The court accepted that significant developments included: • substantial amendments to the pleadings; • a vastly larger disclosure exercise than originally anticipated; • a Further Costs and Case Management Conference; and • the trial estimate increasing from 8 to 16 days. However, establishing a significant development was only one part of the analysis. The court held that revisions for the Further CCMC, trial preparation and trial could proceed in principle because the parties had acted promptly in seeking approval. The amount of those increases was left to be agreed or determined separately. By contrast, proposed revisions for statements of case, disclosure and witness statements were refused. Although those phases had been affected by significant developments, the parties had waited too long before applying to revise their budgets. The judgment also confirms that the following will not ordinarily justify a revised budget: ❌ increases in solicitors' hourly rates; ❌ internal changes to the allocation of work between solicitors and counsel; and ❌ attempts to correct under-budgeting or overspend. 📌 For solicitors managing complex commercial litigation, the timing of an application to revise a budget may be just as important as the existence of the significant development itself. Waiting until the next CCMC—or until several developments have accumulated—may prevent an otherwise justifiable variation from being approved. The judgment is a straightforward application of the approach adopted in Persimmon Homes Ltd v Osborne Clarke LLP, particularly the prospective nature of costs budgeting and the requirement for prompt applications under CPR 3.15A. DeNovo | Legal Costs Experts specialises in high-value and high-stakes litigation costs matters, including costs budgeting and strategic costs management in complex commercial disputes. #CommercialLitigation #CostsBudgeting #CPR315A #CostsManagement #CivilProcedure #BusinessAndPropertyCourts

⚖️ Court of Appeal revisits costs where both parties acted dishonestly The Court of Appeal's decision in Alan Ward & Ors v Donnellan & Ors [2026] EWCA Civ 729 provides useful guidance on costs where findings of dishonesty have been made against both sides of commercial litigation. The appeal concerned costs only. Following a 15-day trial, Mr Donnellan's partnership claim failed and Ebonair succeeded on a related Part 20 claim against Mr Keane and Ms Howard concerning leasehold interests in Creative House. Despite those outcomes, the trial judge made no order for costs on either claim because of findings she had made about Mr Ward's dishonest conduct during the litigation. The Ward parties appealed that costs order. The Court of Appeal allowed the appeal. Lord Justice Lewison held that the judge had erred in principle by focusing on Mr Ward's dishonesty without giving proper weight to Mr Donnellan's dishonest conduct, the fact that his claim had failed in its entirety, and the starting point that the unsuccessful party should pay the successful party's costs. The Court also held that the judge should have considered the Partnership Claim and the Part 20 Claim separately, because Mr Ward's dishonesty concerning Ebonair was irrelevant to the issues that determined the Part 20 Claim. The judgment does not establish any new rule. It reaffirms that a successful party should not recover costs incurred in advancing a dishonest case, but should ordinarily recover the costs reasonably incurred in defeating an unsuccessful claim and exposing the opposing party's dishonesty. Those costs remain subject to assessment in the usual way. Exercising its own discretion, the Court ordered Mr Donnellan to pay 50% of the Ward parties' costs of the Partnership Claim, while Mr Keane and Ms Howard were ordered to pay Ebonair's costs of the successful Part 20 Claim, both on the standard basis if not agreed. The Court also directed that no further deduction should be made on assessment solely because of Mr Ward's dishonesty concerning the Ebonair issue. 💼 For solicitors managing complex commercial litigation, the decision reinforces that findings of dishonesty do not displace the general rule that costs follow the event. The court must evaluate the conduct of all parties and its relevance to each claim before deciding whether, and to what extent, that starting point should be displaced. DeNovo | Legal Costs Experts specialises in high-value and high-stakes litigation costs matters, including complex costs exposure arising from commercial litigation and multi-party proceedings. #CommercialLitigation #CostsLaw #CivilProcedure #LitigationConduct #BusinessAndPropertyCourts #DisputeResolution #CourtOfAppeal

⚖️ Court of Appeal revisits costs where both parties acted dishonestly The Court of Appeal's decision in Alan Ward & Ors v Donnellan & Ors [2026] EWCA Civ 729 provides useful guidance on costs where findings of dishonesty have been made against both sides of commercial litigation. The appeal concerned costs only. Following a 15-day trial, Mr Donnellan's partnership claim failed and Ebonair succeeded on a related Part 20 claim against Mr Keane and Ms Howard concerning leasehold interests in Creative House. Despite those outcomes, the trial judge made no order for costs on either claim because of findings she had made about Mr Ward's dishonest conduct during the litigation. The Ward parties appealed that costs order. The Court of Appeal allowed the appeal. Lord Justice Lewison held that the judge had erred in principle by focusing on Mr Ward's dishonesty without giving proper weight to Mr Donnellan's dishonest conduct, the fact that his claim had failed in its entirety, and the starting point that the unsuccessful party should pay the successful party's costs. The Court also held that the judge should have considered the Partnership Claim and the Part 20 Claim separately, because Mr Ward's dishonesty concerning Ebonair was irrelevant to the issues that determined the Part 20 Claim. The judgment does not establish any new rule. It reaffirms that a successful party should not recover costs incurred in advancing a dishonest case, but should ordinarily recover the costs reasonably incurred in defeating an unsuccessful claim and exposing the opposing party's dishonesty. Those costs remain subject to assessment in the usual way. Exercising its own discretion, the Court ordered Mr Donnellan to pay 50% of the Ward parties' costs of the Partnership Claim, while Mr Keane and Ms Howard were ordered to pay Ebonair's costs of the successful Part 20 Claim, both on the standard basis if not agreed. The Court also directed that no further deduction should be made on assessment solely because of Mr Ward's dishonesty concerning the Ebonair issue. 💼 For solicitors managing complex commercial litigation, the decision reinforces that findings of dishonesty do not displace the general rule that costs follow the event. The court must evaluate the conduct of all parties and its relevance to each claim before deciding whether, and to what extent, that starting point should be displaced. DeNovo | Legal Costs Experts specialises in high-value and high-stakes litigation costs matters, including complex costs exposure arising from commercial litigation and multi-party proceedings. #CommercialLitigation #CostsLaw #CivilProcedure #LitigationConduct #BusinessAndPropertyCourts #DisputeResolution #CourtOfAppeal

💷 Indemnity costs after funding falls away: CAT gives important guidance on transparency in collective proceedings ⚖️ The Competition Appeal Tribunal's decision in Sciallis v Fender Musical Instruments Europe Ltd & Ors [2026] CAT 56 is likely to attract attention well beyond competition litigation. The proposed collective proceedings—arising from alleged resale price maintenance in the musical instruments sector—never reached certification. The proposed class representative was ultimately unable to secure litigation funding and applied to withdraw the claims. The costs decision, however, is where the judgment becomes particularly interesting. 📌 The Tribunal accepted that, when the first claims were issued, it was legitimate to explain that funding arrangements were still being finalised. The difficulty arose once those negotiations ended in early 2023. Rather than promptly informing the Tribunal and the proposed defendants, further applications (including ex parte applications relating to service out) continued while correspondence over the funding position was described by the Tribunal as "unhelpful, uncooperative, deliberately obfuscatory and misleading." The Tribunal concluded that this conduct was "unreasonable to a high degree and outside the norm of litigation practice." 💰 The costs consequences reflected that distinction: • standard basis costs up to April 2023; • indemnity basis costs thereafter; • summary assessments exceeding £600,000 for three defendants; and • payments on account of £850,000 for the remaining defendants pending detailed assessment. The Tribunal also held that indemnity costs did not justify every level of expenditure claimed, declining to summarily assess the substantial costs claimed by Yamaha and Casio and instead ordering detailed assessment after payments on account. For solicitors managing complex, funded litigation, the decision demonstrates that: ✅ transparency about funding is a continuing obligation in CAT collective proceedings; ✅ material changes must be disclosed promptly to both the Tribunal and other parties; and ✅ even where indemnity costs are justified, the court will still scrutinise the reasonableness of the receiving party's costs. 📞 If you're dealing with significant costs exposure in complex commercial or competition litigation, our team at DeNovo | Legal Costs Experts specialises in high-value, high-stakes costs disputes. We'd be pleased to discuss how we can help. #CompetitionLaw #CollectiveProceedings #LitigationFunding #IndemnityCosts #CostsLaw #CommercialLitigation #LitigationStrategy #CivilProcedure #CAT #DisputeResolution

⚖️ Costs as damages: what if the defendant's wrongdoing forced you to bring two sets of proceedings? The High Court has recently considered an unusual—and potentially significant—question in Musst Holdings Ltd v Astra Asset Management UK Ltd [2026] EWHC 1599 (Ch). Musst had already established that Astra was liable for negligent misrepresentation. The court accepted that those misrepresentations meant Musst did not discover the true position until disclosure in the first action. Had the relevant information been available earlier, it would have pursued all of its claims in one set of proceedings rather than having to issue a second claim. In bringing a second claim, Musst incurred a second issue fee, additional ATE insurance costs and further litigation funding costs. It argued that these were not simply litigation costs—they were additional losses caused by Astra's tort. Importantly, Leech J accepted the factual causation. He found that, but for Astra's negligent misrepresentation, Musst would have avoided those additional funding arrangements and associated costs. The claim nevertheless failed because the court distinguished between the compensatory principle and the long-established costs principle. Ordinarily, a claimant is entitled to recover losses caused by a defendant's wrongdoing. However, English law has long treated the costs of litigation differently. Litigation costs are generally recoverable only through the CPR costs regime—not by claiming them as substantive damages. Musst argued that this case fell within the recognised exception because it relied on an independent cause of action in negligent misrepresentation. Although there was a separate cause of action, both the original proceedings and the later proceedings were ordinary High Court litigation governed by the CPR costs rules. The recognised exception therefore did not apply. Allowing recovery would undermine the statutory and procedural costs regime by permitting litigation costs to be recovered "by a side wind". The same reasoning defeated the claim for litigation funding fees. The court characterised the funder's return as part of the costs of litigation rather than an independent head of loss, despite accepting that the need for the additional funding arose from Astra's wrongdoing. The judgment also places considerable weight on the policy concern that permitting recovery would encourage parties to enter funding arrangements in the expectation that the defendant would ultimately bear the commercial cost. For costs practitioners, the judgment is an interesting examination of the boundary between compensatory damages and litigation costs. 📩 If you are involved in a substantial commercial dispute and require specialist costs input, DeNovo | Legal Costs Experts would be pleased to assist. #LitigationCosts #CommercialLitigation #CivilProcedure #LitigationFunding #ATEInsurance #CostsLaw #DisputeResolution #HighCourt #Denovo

⚖️ Costs as damages: what if the defendant's wrongdoing forced you to bring two sets of proceedings? The High Court has recently considered an unusual—and potentially significant—question in Musst Holdings Ltd v Astra Asset Management UK Ltd [2026] EWHC 1599 (Ch). Musst had already established that Astra was liable for negligent misrepresentation. The court accepted that those misrepresentations meant Musst did not discover the true position until disclosure in the first action. Had the relevant information been available earlier, it would have pursued all of its claims in one set of proceedings rather than having to issue a second claim. In bringing a second claim, Musst incurred a second issue fee, additional ATE insurance costs and further litigation funding costs. It argued that these were not simply litigation costs—they were additional losses caused by Astra's tort. Importantly, Leech J accepted the factual causation. He found that, but for Astra's negligent misrepresentation, Musst would have avoided those additional funding arrangements and associated costs. The claim nevertheless failed because the court distinguished between the compensatory principle and the long-established costs principle. Ordinarily, a claimant is entitled to recover losses caused by a defendant's wrongdoing. However, English law has long treated the costs of litigation differently. Litigation costs are generally recoverable only through the CPR costs regime—not by claiming them as substantive damages. Musst argued that this case fell within the recognised exception because it relied on an independent cause of action in negligent misrepresentation. Although there was a separate cause of action, both the original proceedings and the later proceedings were ordinary High Court litigation governed by the CPR costs rules. The recognised exception therefore did not apply. Allowing recovery would undermine the statutory and procedural costs regime by permitting litigation costs to be recovered "by a side wind". The same reasoning defeated the claim for litigation funding fees. The court characterised the funder's return as part of the costs of litigation rather than an independent head of loss, despite accepting that the need for the additional funding arose from Astra's wrongdoing. The judgment also places considerable weight on the policy concern that permitting recovery would encourage parties to enter funding arrangements in the expectation that the defendant would ultimately bear the commercial cost. For costs practitioners, the judgment is an interesting examination of the boundary between compensatory damages and litigation costs. 📩 If you are involved in a substantial commercial dispute and require specialist costs input, DeNovo | Legal Costs Experts would be pleased to assist. #LitigationCosts #CommercialLitigation #CivilProcedure #LitigationFunding #ATEInsurance #CostsLaw #DisputeResolution #HighCourt #Denovo

The costs judgment in Balachandra is worth reading for its treatment of CPR 44.2. In particular, the court's analysis of pre-action conduct sits alongside its rejection of several other arguments advanced in support of a percentage reduction.